May 2024
If you’re new to the homebuying world, you’ve probably heard the term "proceedable position" but may not fully understand what it means. In this first post of our myth-busting series, we’ll explain what being in a proceedable position entails.
When you inquire about a new build home, you might be told that you can look around but can’t reserve until you’re in a proceedable position. Sometimes, you may even be told you can’t view the property at all if you’re not in this position. This can be disheartening and confusing, but it’s a common practice in the industry.
Essentially, being in a proceedable position means you can demonstrate that you have the necessary funds to proceed with the transaction. Let’s break this down into a few scenarios:
If you’re a first-time buyer, you need to prove that you have the deposit money available and an in-date mortgage decision in principle for the full purchase amount. We’ll discuss proof of funding and what a mortgage decision in principle is in future posts in this series.
As a cash buyer, you need to demonstrate that you have sufficient funds available to purchase the property outright.
If you need to sell your current property to fund all or part of your new home purchase, it gets a bit more complicated.
1. Full Purchase: You need to have accepted an offer on your current property and have a sales memorandum from your estate agent or a solicitor’s letter if you’re selling privately.
2. Partial Purchase: You still need the sales memorandum, but you also need proof of any cash deposit and your mortgage decision in principle.
Additionally, you need to demonstrate a complete chain. We carry out a chain check with your agent, but that’s a topic for another post in this series.
There are many ways to fund a property purchase, but these are the most common scenarios. Always consult your financial advisor for property financial advice.
In essence, you need to demonstrate that you can complete the transaction in a timely manner. It would be a waste of everyone’s time for a developer or agent to accept a reservation on a new build home if the buyer can’t financially commit to the purchase.
Regarding viewings, if demand is high, we prioritise viewings for clients who are proceedable over those who aren’t. This is only fair. However, during softer periods, we may allow viewings for clients who show genuine interest and have their property on the market, have had it valued, or have engaged with an agent.
If you’re thinking of moving and need to sell your property, it’s imperative to get your home on the market straight away, accept an offer, and get yourself into a strong buying position. This way, you’ll be ready to move immediately when the right house comes along.
So, that’s what the industry means by being in a proceedable position. If you’re interested in any of our homes, please don’t hesitate to pick up the phone and chat with our friendly sales team. We’re here to explain this and any other jargon you may come across in simple, straightforward terms, and offer advice to help you move forward. Moving house can be stressful, but we’re here to make the process a little smoother.
